Govt urged to exit utilities ownership

GOVERNMENTS must start “divesting” their interest in state-owned utilities, an ex-Water & Sewerage general manager urged yesterday, with progress often stifled by changing administrations.

Glen Laville, pictured, who was sacked earlier this year in the wake of the Ernst & Young (EY) forensic audit’s findings, re-emerged as a panelist at yesterday’s Caribbean Infrastructure Forum (CARIF) to confirm how government interference and politically-led decision-making often resulted in state-owned utilities supplying services at a price that failed to cover their costs.

“One of the things that has been shown in a lot of other jurisdictions is that even if government owns the utility, and they establish an independent regulator to set tariffs, the Government does not allow the utility to submit a tariff request, meaning that the utility does not recover the cost of service,” Mr Laville, who will have had great experience of this at the Water & Sewerage Corporation, said.

“If you don’t recover the cost of service it means the [quality] of service goes down, government has to subsidise more and, at the end of the day, you pay one way or another. It’s better to have it run efficiently and independently. If government has to subsidise individuals who need assistance financially let it be done that way so it’s more transparent.”

Mr Laville added: “Over time what we have seen is that when administrations change, each administration feels that there is a better way to do something, so they stop everything that has been done, thereby losing some of the progress.”

The former Water & Sewerage Corporation general manager is understood to be taking legal action against both the utility and the Government over his dismissal, having disputed the numerous findings against him while arguing that the report’s disclosure had caused morale at the Corporation to plummet.

Speaking on the MIYA Bahamas project to reduce the leakage from the Corporation’s distribution system, Mr Laville said: “Over the last six years about six billion gallons of water has been saved. The project goes into 2022.

“Assuming all the targets are met, which they have met or exceeded so far, 12 billion gallons should be saved. We were able to bring on Baha Mar without having to increase any production capacity. Right now we have spare capacity so we can take on any additional customers.”

Miya, a wholly-owned subsidiary of the Arison Investment Group, signed a 10-year, $83m contract with the Water and Sewerage Corporation (WSC) to reduce the leakage from its distribution system. The Corporation was previously said to have been losing close to seven million gallons of water a day, which cost it more than a $16m a year.